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Economy in Brief

U.S. Chicago Business Barometer Hit a Multi-Year High in March
by Kathleen Stephansen  March 31, 2021

• The ISM-Chicago Purchasing Managers Business Barometer expanded to 66.3 in March.

• Production posted the largest gain.

The ISM-Chicago Purchasing Managers Business Barometer rose to 66.3 in March, the highest level since July 2018, and more than reversing the February 4.3 points decline. The Action Economics Forecast expected a reading of 60.3. An index above 50 suggests growing business activity in the Chicago area.

Haver Analytics constructs an ISM-Adjusted Chicago Business Barometer with methodology similar to the ISM Composite Index. This measure rose to 64.9 from 57.6 in February, keeping the index well above the low of 40.7 reached in June 2020.

Production jumped 10 points to 72, new orders rose by 7.1 points to 62.3. Order backlogs was the only component to post a decline in March to 57 from 63 in February. Inventories rose 5.1 points, reportedly driven by supply chain issues. Supply chain issues also continued to impact supplier deliveries, which rose to 79.9, up from 71.5 in February. For an historical perspective, the index stood at 73.8 in Q1:2021, the highest level since Q2:1974.

Employment reached above the expansion threshold of 50 for the first time since June 2019 with a read of 54.6.

Prices paid reached a milestone as well, jumping to 80.4, the highest level since August 2018.

In response to this month's special question "As the first quarter of 2021 comes to an end, are you planning to amend your inventory position due to any of the following conditions?" 67.6% of respondents planned changes due to supplier lead-times.

The MNI Chicago Report is produced by MNI in partnership with ISM-Chicago. The survey is collected online each month from manufacturing and non-manufacturing firms in the Chicago area. Summary data are contained in Haver's USECON database with detail including the ISM-style index in the SURVEYS database.

Chicago Purchasing Managers Index (%, SA) Mar Feb Jan Mar '20 2020 2019 2018
General Business Barometer 66.3 59.5 63.8 47.8 49.0 51.4 62.4
ISM-Adjusted General Business Barometer 64.9 57.6 61.2 47.1 49.6 51.5 60.8
   Production 72.0 62.0 71.3 45.7 47.9 51.3 64.6
   New Orders 62.3 55.2 66.2 44.8 47.1 52.0 63.8
   Order Backlogs 57.0 63.0 60.1 39.9 42.6 46.9 58.0
   Inventories 55.6 50.4 55.1 35.2 44.7 48.7 55.4
   Employment 54.6 49.1 43.4 44.9 41.8 49.6 55.2
   Supplier Deliveries 79.9 71.5 69.9 64.9 66.4 55.6 64.8
   Prices Paid 80.4 75.3 75.2 56.0 59.5 58.5 74.0
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